By the end of the year sonic had generated significant

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Reference no: EM13576789

Allowance method: analysis of receivables. At a January 2002 meeting, the president of Sonic Sound directed the sales staff %u201Cto move some product this year.%u201D The president noted that the credit evaluation department was being disbanded because it had restricted the company%u2019s growth. Credit decisions would now be made by the sales staff.

By the end of the year, Sonic had generated significant gains in sales, and the president was very pleased. The following data were provided by the accounting department:

20X2		20X1
Sales	$23,987,000		$8,423,000
Accounts Receivable, 12/31	12,444,000		1,056,000
Allowance for Uncollectible Accounts, 12/31	?		23,000 cr.

The $12,444,000 receivables balance was aged as follows:

Age of Receivable	Amount	Percentage of Accounts Expected to Be Collected
Under 31 days	$5,321,000	99%
31260 days	3,890,000	90
61290 days	1,067,000	80
Over 90 days	2,166,000	60

Can someone break down even more how they got this answer below?

5321* (1-.99) +3890(1-.9) + 1,067*(1-.8) +2,166*(1-.6)= 1,522

Reference no: EM13576789

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